A monopolist if it chooses to sell fewer units of output. a. can set its price wherever it desires Ob. must decrease the price Oc. can increase the price O d. cannot change the price A monopolist suffers a loss if its curve is everywhere above its curve. Oa. Demand; ATC O b. ATC; MC O c. ATC; Demand O d. MC; AVC The broadly a market is defined, the more difficult it becomes to find

A monopolist if it chooses to sell fewer units of output. a. can set its price wherever it desires Ob. must decrease the price Oc. can increase the price O d. cannot change the price A monopolist suffers a loss if its curve is everywhere above its curve. Oa. Demand; ATC O b. ATC; MC O c. ATC; Demand O d. MC; AVC The broadly a market is defined, the more difficult it becomes to find

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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For the monopoly shown above, which of the following best describes its practices? Price, Costs MC ATC D P3. P2. P1 MR Q2 Q1 Demand Quantity OA Operating with profit of area AP1ED OB. Operating at a loss of area ABEC C. Shutting down OD, Breaking even, with a deadweight loss to society of area DCE DE. Operating with profit area ADEP1 and deadweight loss to society of area DCE
The figure shows the demand curve faced by a monopolist. What is the price effect of a price increase from $3 to $5? OA. $800 OB. $400 OC. $1,000 OD. $200 C Price (5) 10 9 8 17 6 3 2 1 0 100 200 300 400 500 600 700 800 900 Quantity (units)
O Macmillan Learning (Figure: Determining Monopolist Profit) Based on the graph, the profit-maximizing price is at point Price and Cost h Of. O g. d. C MR Output MC ATC
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Please no written by hand solutions 1. Assume the cost function for a monopolist is given by TC(q) = 30Q; the inverse demand function for the firms' output is p = 120 - Q, where Q is the total output. a. Find the profit-maximizing combination of price and quantity b. Estimate consumer surplus, producer surplus and the deadweight loss associated with this monopolist C. If this industry became perfectly competitive, explain and estimate the consumer surplus, producer surplus and deadweight loss of the industry d. Graph your answers for a, b, and c 2. Now assume that the monopolist above splits into two. Each of two firms has the cost function TC(q) = 30q. a. What are the firms' outputs in a Nash equilibrium of Cournot's model? b. Estimate the economic profits for each firm c. If firm 1 is the leader and firm 2 the follower, find the equilibrium outputs for the Stackelberg solution.
Figure monopolist, to answer questions a-c. a. indicate the profit maximizing price and output level and label them P 1 and Q 1. b. Shade in the area that represents the firm's economic profit (or loss). c. If this firm wished to discourage entry by other firms it could produce the output level at which it earns only a zero economic profit. Indicate the price and output level associated with a zero economic profit and label them P 2 and Q 2.
A natural monopoly occurs when A. one firm can supply the entire market at a lower price per unit than two or more firms can. B. a few firms collude to act as a single firm. C. one firm owns all the vital resources needed to produce a particular good. D. one firm captures all the consumer surplus.
If a monopolist faces an inverse demand curve, p(y) = 100-2y and has constant marginal costs of $32 and zero fixed costs and if this monopolist is able to practice perfect price discrimination, its total profits will be O a. $1,156. O b. $17. O c. $578. O d. $1,734. O e. $289.
Q9
The monopoly supply curve is the O same as the competitive market supply curve. O portion of marginal costs curve where marginal costs exceed the minimum value of average variable costs. O result of market power and production costs. O none of the above